1. Field of the Invention
The present invention relates to computer software, and more particularly to electronic transaction processing between distributed computer systems.
2. Description of the Related Art
Electronic data interchange (EDI) generally refers to the process of transmitting and/or receiving data in a predetermined digital format from one computer system to another computer system. EDI can be a fast, inexpensive, and relatively safe method of processing business-related transactions. For example, EDI can be used to send purchase orders, invoices, shipping notices, and other frequently used electronic business documents. EDI can greatly reduce errors in transaction processing by eliminating the need for manual entry of data in hardcopy business documents. EDI is therefore an advantageous method of processing business transactions, and businesses in particular fields such as insurance often expect to communicate with each other electronically.
In order for their computers to communicate effectively with one another, EDI participants must follow standards for the format and transmission of electronic data. Several standards maintenance organizations have set forth EDI standards. Examples of such standards and the associated maintenance organizations include ANSI X12, which was developed by the American National Standards Institute; the Uniform Communications Standards (UCS); the TDCC standard developed by the Transportation Data Coordinating Committee; and UN-EDIFACT (EDI for Administration, Commerce, and Transport), an international standard based on ANSI X12 and Trade Data Interchange standards commonly used in Europe.
The National Securities Clearing Corporation (NSCC) is another organization that promulgates standards for EDI. The NSCC maintains the Annuity Processing Service (APS), an insurance industry clearinghouse which provides a flexible system for the transmission of information to and from trading partners such as insurance carriers, broker/dealers, agents, banks, and other organizations. The Annuity Processing Service may also be referred to as the Insurance Processing Service (IPS). Trading partners who are members of the NSCC may use the APS clearinghouse, for example, to transmit annuity information and clear associated monies so that transactions can be finalized quickly. As used herein, “trading partners” refer to business entities who transact business with one another through electronic data interchange. A “sending trading partner” is a trading partner who electronically sends data related to a transaction. Often, the sending trading partner is the trading partner who initiates the transaction. A “receiving trading partner” is a trading partner who electronically receives data related to a transaction. For some transactions, a sending trading partner and a receiving trading partner may be the same entity.
To enable the electronic processing of transactions through the APS, the NSCC provides standards for data formats for a variety of common transactions. As used herein, a “transaction” is any business event that is processed electronically. Transactions, including those supported by the APS, include business events such as deposits, applications, commission payments or settlements, positions and valuations (full value and refreshed value), annuity asset pricing, financial activity reporting, and other suitable events. Positions and valuations full refresh (PVF) is a transaction involving the financial and non-financial information about an annuity contract at a particular point in time. The PVF includes contract data such as valuations, replacements, producer information, owner information, and payor information. Positions and valuations focused refresh (PFF) is also a transaction involving the financial and non-financial information about an annuity contract at a particular point in time. The PFF record is a shorter version of the PVF record and includes the data and value for each contract. Annuity asset pricing (AAP) is a transaction involving the pricing or unit value of the underlying variable investment funds supporting a contract.
The APS clearinghouse enables trading partners to transmit data to a variety of other trading partners without establishing proprietary networks. However, the adherence of trading partners to industry standard data formats is not enough to automate all transactions. Existing approaches often require the intervention of a skilled computer programmer for certain tasks and transactions. For example, in order to process a transaction such as a commission payment request received electronically from a broker/dealer, an insurance carrier often must write, test, and install a custom program in a programming language such as COBOL to tell its payment system to obtain the necessary broker-related information from another source, such as a particular database. This approach towards EDI tends to be wasteful, time-consuming, and expensive.
For at least the foregoing reasons, there is a need for an improved system and method for processing transactions in a more efficient manner.